Scarcity as the Reason for Economic Problem:
Scarcity refers to the limited availability of resources in relation to unlimited human wants. It is the primary reason for the existence of economic problems. Economic problem arises when there is a mismatch between unlimited wants and limited resources. This assertion can be supported by the following explanation:

Alternative Uses and Economic Problem:
- Limited Resources: The reason behind scarcity is the limited availability of resources. Resources include land, labor, capital, and entrepreneurship, which are necessary to produce goods and services. These resources are finite in nature and cannot fulfill all the desired wants of individuals.
- Unlimited Wants: On the other hand, human wants are unlimited. People always have numerous desires and aspirations that they wish to fulfill. These wants can range from basic necessities like food, shelter, and clothing to luxury goods and services.
- Opportunity Cost: Scarcity leads to the concept of opportunity cost. When resources are scarce, they need to be allocated among different alternative uses. Choosing one particular use of resources implies sacrificing the opportunity to utilize them elsewhere. This trade-off between different alternative uses results in the economic problem.
- Allocation of Resources: Economic problem arises when there is a need to make choices regarding the allocation of limited resources among different alternative uses. For example, a government may have to decide whether to invest in education or healthcare, as allocating resources to one sector means sacrificing the other. This decision-making process is influenced by various factors like efficiency, equity, and sustainability.
- Production and Distribution: Scarcity also affects the production and distribution of goods and services. Limited resources imply that not all wants can be satisfied. This leads to the need for prioritization and efficient utilization of available resources. Additionally, scarcity also affects the distribution of goods and services among individuals, as there may not be enough to satisfy everyone's wants.
- Price Mechanism: Scarcity also gives rise to the price mechanism in an economy. When resources are scarce, their prices tend to rise, reflecting the imbalance between demand and supply. This price mechanism helps in the allocation of resources by signaling producers and consumers about the relative scarcity of certain goods and services.
- Innovation and Efficiency: Scarcity also serves as a driver for innovation and efficiency. When resources are scarce, individuals and organizations are motivated to find innovative ways to produce more with limited resources. This leads to technological advancements and increased productivity, which can help alleviate the economic problem to some extent.

In conclusion, scarcity is indeed the reason for the economic problem. The limited availability of resources in relation to unlimited wants necessitates the need for decision-making, trade-offs, and efficient resource allocation. This economic problem can be addressed through various mechanisms like the price mechanism, innovation, and efficiency improvements.